Top Trending Investments For This Week

Equities declined last week, heralded by a 1.3% decline in the S&P 500 and a substantial drop in the Nasdaq 100. The culprit appears to be the release of the Federal Reserve’s March meeting minutes. The report indicates that Fed officials plan for at least one 0.5% interest rate hike in the future instead of the 0.25% increases previously stated. Additionally, the Central Bank may start reducing its investment balance sheet by $95 billion per month beginning in May.

Prior market performance had already priced in some expected hawkishness from this report. Still, some investors appeared spooked by the extent of the Fed’s response to surging inflation. Fortunately Q.ai’s deep learning algorithms are here to help. We’ve crunched the data to bring you the latest Top Trending investments that stand out in a fast-moving market.

Morningstar, Inc. (MORN)

Morningstar, Inc. (MORN) closed out the week at $283.06 per share, down 2.8% for the day and 17.2% for the year. Our AI rates this company B in Technicals, C in Growth and Quality Value, and D in Low Volatility Momentum.

Morningstar, Inc. is famous for its investment research and marketing ratings data. Recently, the Chicago-based company announced plans to buy data and news service provider Leveraged Commentary & Data from S&P Global. The deal will close for a sum of $600 to $650 million, depending on if LCD meetings certain market conditions.

Over the last three fiscal years, Morningstar’s revenue grew 44.1% from $1.18 billion to nearly $1.7 billion. Operating income soared nearly 50% in the period from $189.6 million to $284 million. As a result, per-share earnings leapt 26.4% from $3.52 to $4.45. Meanwhile, return on equity (ROE) slumped slightly from 15% to 14.4%.

Microsoft Corporation (MSFT)

Microsoft Corporation (MSFT) closed out last week at $296.97 per share, a drop of 1.5% for the day. The stock sits down over 11.7% for the year and is still slipping from its 10-day price average of $308.14 a share. Our AI rates Microsoft A in Low Volatility Momentum, B in Quality Value and C in Technicals and Growth.

Microsoft Corporation is renowned for its technology and tech-based services, from its Windows computer software to the cloud. The stock slipped lower last week as part of the tech sell-off following the Federal Reserve minutes release. (Hardly surprising, given that growth stocks like tech companies often see poorer performance in high-rate environments.) But good news lies on the horizon, as Microsoft also won part of a three-way cloud computing contract split courtesy of Boeing.

Over the last three fiscal years, Microsoft’s revenue has soared nearly 47% from $125.8 billion to $168.1 billion. Meanwhile, operating income leapt over 83% to $69.9 billion from $42.96 billion, while per-share earnings are up 85.6% from $5.06 to $8.05. At the same time, ROE has risen from 42.4% to 47%. Currently, the company trades at 30x forward earnings, and we expect Microsoft’s 12-month revenue to expand by 6.8% in the next 12 months.

NVIDIA Corporation (NVDA)

Nvidia Corporation (NVDA) closed out last Friday at $231.19 per share, down 4.5% for the day and 21.4% for the year. The stock is down over $24 from its 22-day price average and $32 from its 10-day price average. Our AI rates Nvidia B in Growth, C in Technicals and Quality Value, and D in Low Volatility Momentum.

Nvidia has enjoyed soaring prices and demand in recent quarters, courtesy of the global supply chip shortages. But several analysts, including those at Truist and Robert W. Baird, now warn that the tide could soon turn. Current and future demand headwinds coupled with worldwide supply increases have the potential to pull down prices and profit margins in coming months. Despite the possibility of future challenges, Nvidia recently filed with the SEC to double its share issuance from 4 billion to 8 billion.

In the last three years, Nvidia’s revenue has soared from $10.9 billion to $26.9 billion, for a total chance of 146.5%. The company’s operating income grew even more astronomically at 252.8% growth from $2.85 billion to $10 billion. Meanwhile, per-share earnings have over tripled from $1.13 to $3.85. Return on equity also saw impressive growth, rising from 26% to 44.8%.

Currently, Nvidia trades at 41x forward earnings.

Netflix, Inc. (NFLX)

Netflix, Inc. (NFLX) closed down 1.7% on Friday, ending the week at $355.88 per share. The stock sits down 41% YTD and remains over $20 below its 10-day price average. Our AI rates Netflix C in Low Volatility Momentum and Quality Value and D in Technicals and Growth.

Netflix’s recent performance and trending status is likely linked to a combination of ongoing popularity and the Russia-Ukraine conflict. On one hand, Netflix continues to pump out beloved content to its fans and plans to bring new gaming content in future seasons. On the other, Netflix is among several internet-based companies likely to lose upwards of 1-2 million subscribers as it shuts down services in Russian-controlled regions.

During the last three fiscal years, Netflix’s revenue grew 47.3% from $20.16 billion to $26.7 billion. Operating income jumped 138% in the period from $2.6 billion to $6.2 billion, while per-share earnings soared 172% from $4.13 to $11.24. Return on equity also saw growth from 29% to 38%.

Currently, Netflix trades at 31.9x forward earnings.

The Boeing Company (BA)

The Boeing Company (BA) slipped almost 1.6% Friday to $172.20 per share, falling over $10 from its 22-day price average. The stock sits down around 12% for the year. Our AI rates Boeing C in Technicals, D in Growth and Low Volatility Momentum, and F in Quality Value.

Boeing is trending this week after announcing that it plans to split a huge cloud computing project among Amazon, Microsoft, and Alphabet. While it hasn’t disclosed financial terms yet, reports suggest Boeing’s contract could be worth around $1 billion. The project aims to move software applications to remote cloud-based data centers from its current on-premises facilities. Still, Boeing’s stock price dropped amidst the broader U.S. equities sell-off.

Over the last three fiscal years, Boeing’s revenue dropped from $76.6 billion to $62.3 billion. Meanwhile, operating income plunged to $687 million from $2.1 billion three years prior. That said, per-share earnings have actually grown in the last three years from $1.12 to $7.15.

Currently, Boeing trades at 52.7x forward earnings.

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